Navan, a platform specializing in corporate travel and expense management, ended its first day on the Nasdaq with shares falling 20% from its initial public offering price of $25, leaving the decade-old business with a market value near $4.7 billion.
This marks the first time a company has taken advantage of a new SEC regulation permitting public listings to proceed during a government shutdown.
Traditionally, IPOs require a thorough review and final sign-off from SEC officials, but under this new process, companies can automatically move forward with their IPO 20 days after submitting their price range, sidestepping the need for direct SEC approval.
However, this alternative route comes with its own set of risks: regulatory authorities retain the right to examine the filings later. Should the SEC uncover significant omissions or problems after the fact, the company may be compelled to revise its disclosures, which could depress the stock price and potentially result in lawsuits.
Navan opted to move ahead with its public offering despite these uncertainties, largely because most of its registration documents had already undergone SEC review prior to the government shutdown that began on October 1.
This regulatory ambiguity is likely a factor contributing to the stock’s initial drop.
Other companies considering IPOs are watching how Navan’s debut unfolds. Startups aiming to go public before year’s end must soon decide whether to face these regulatory unknowns or postpone their plans until next year.
Navan has been preparing for a public listing for several years. Reports indicate the company confidentially filed for an IPO in 2022 and was targeting a $12 billion valuation for an early 2023 launch.
Previously known as TripActions, Navan’s last private valuation was $9.2 billion after securing $154 million in Series G funding in October 2022.
Navan’s client roster features companies such as Shopify, Zoom, Wayfair, OpenAI, and Thomson Reuters. The company states that its AI assistant, Ava, manages about half of all customer interactions related to booking or modifying travel arrangements. Its expense management platform streamlines employee spending with features like automated receipt capture and categorization.
According to its S1 filing, Navan posted $613 million in revenue over the past year, reflecting a 32% increase, but also reported a net loss of $188 million.
Prior to going public, Navan’s major venture investors included Lightspeed (with a 24.8% share), solo investor Oren Zeev (18.6%), Andreessen Horowitz (12.6%), and Greenoaks (7.1%).
